Broadcom is being relentless in its effort to acquire the chipmaker, Qualcomm. The company’s ‘no for an answer’ attitude falls into place with some sources who have claimed that the wireless chip manufacturer is about to raise its takeover bid for Qualcomm from $70 per share to between $80 and $82 per share. This would result in an amount totaling $120 billion. The deal, if it goes through, could become the biggest in terms of the number of billions that Broadcom is prepared to give for Qualcomm.
Apart from the $120 billion acquisition price, Broadcom has also been reported to offer Qualcomm a higher breakup fee. This higher breakup fee is given when regulators do not approve of the deal. In short, Qualcomm would be getting something or the other, whether the deal goes through or not. The breakup fee normally comes to around 3 to 4 percent of the acquisition offer.
Broadcom is confident that the deal can be completed in a period of 12 months
You have got to admire the confidence of Broadcom, as sources close to these specific industries have stated that the deal can be completed within 12 months of signing an agreement.
Unfortunately, Qualcomm is not looking in the same direction because even if the company decides to agree to the offer, there is the United States regulatory authority, which will put the deal under immense investigation and scrutiny, with a higher probability that the deal would not be approved.
Qualcomm’s acquisition would favor Broadcom immensely. The company is already in partnership with Apple and supplies it with chips, and if this deal comes through, then it will have another avenue for revenue generation.
The deal is not bad for Qualcomm either. With the ongoing legal battles taking place between the Snapdragon chipset manufacturer and Apple, the acquisition could mean that Broadcom could sway Apple to tone down their legal attacks, not mention a huge amount of cash for Qualcomm.
Broadcom is more than eager to expand its 5G stronghold and looking at how Qualcomm is already the leading manufacturer of LTE chips and ‘soon to be’ 5G modems, this is one offer that the company is not willing to back down from.